The number of people employed by the non-governmental sector increased from 2012 to 2013, as did the labour costs and average incomes of people employed by such organisations, according to a recently published study by the Central Statistical Office (KSH).

Citing the KSH figures, the media and several news portals have reported that the non-governmental sector has fallen into decline since 2012. However, the study published by the Central Statistical Office presents an opposite picture.

The KSH data cited in various press reports concerns the non-profit sector, which is not analogous with “non-governmental”, civil organisations. NGOs only represent part of the non-profit sector, including civil organisations, associations registered in Hungary and foundations, with the exclusion of public foundations and party foundations.

It must be noted with reference to the observations made in the media concerning the reduction of the number of civil organisations that the number of organisations quoted in the KSH report is not exhaustive in view of the fact that the number was determined on the basis of annual data provided to the Statistical Office by civil and other non-profit organisations. The number of registered non-governmental organisations operating in Hungary is currently some 20 thousand more than the number who provided data to the KSH.

With regard to negative changes in income, the KSH report entitled “The most important characteristics of the none-profit sector 2013” clearly states that a decrease was only discernible in the case of “non-profit companies of a service-providing nature”.

With relation to changes in the ratio of state funding, press reports have failed to mention an extremely relevant reason for this, as specially noted in the KSH report, namely that 34 billion forints in funding derived from corporation taxes (TAO) were accounted for as private funding for the first time in 2013. The goal of the corporation tax allowance is for the state to enable profitable enterprises to deduct from their taxes the sponsorship of sports and arts organisations.

It must also be noted that the termination of several non-profit organisations also lead to changes in data. This significant change may be attributed to changes that occurred in public services and the performance of public duties, which are primarily related to the reorganisation of the healthcare sector in 2013. Many healthcare institutions that previously operated as business organisations now perform their duties are budgetary institutions. As a result of the reorganisation and the transfer of the duties of non-profit companies to another sector, the previously relevant funding and employment figures appeared as a surplus within another sector.

The change in the non-profit sector’s sources of income is in the most part derived from the abovementioned restructuring and reorganisation, which caused income to appear in data for another sector. Accordingly, it is in fact the case that, contrary to what has been suggested by various media sources, it can clearly be shown that the income generated by classic non-governmental organisations actually increased by 8.2% from 2012 to 2013.

In addition to income data, the employment data put forward by several news portals is also incorrect in view of the fact that the number of people employed by non-governmental organisations increased from 2012 to 2013. The KSH data also shows that the labour costs and average incomes of people employed by such organisations also increased during this period.

(Prime Minister's Office)